Paying your nanny in cash
Do you employ a nanny?
And do you pay them in cash?
While it may be tempting to take this route because it feels easier, there are a number of reasons why you should never pay you nanny in cash.
It is essential to be aware of the reasons for this to avoid potential legal and financial issues.
In this blog, we'll have a look at the main reasons why you should avoid paying your nanny in cash.
5 reasons you should never pay your nanny in cash...
1. There is no paper trail
When you pay your nanny in cash, there's no paper trail, which means you don't have a payment record.
This will make it difficult to prove you've paid your nanny if there's a dispute or legal issue.
2. No proof of employment
Paying your nanny in cash means that you don't have any proof of employment, such as payslips or a record of the hours they have worked.
This can make it difficult to prove that your nanny is employed by you, which can cause problems if there is ever a dispute or legal issue.
3. Tax and National Insurance issues
Paying your nanny in cash also means that you may not be paying the right amount of tax and National Insurance (NI).
As an employer, it is your responsibility to deduct tax and National Insurance from your nanny's pay and pay it to HMRC.
You could be liable for fines and legal action if you don't pay the right amount of tax and NI.
4. Insurance issues
If you pay your nanny in cash, they may not be covered by your employer's liability insurance.
This can leave you vulnerable if your nanny is injured while working for you.
5. Trust issues
Paying your nanny in cash can also lead to trust issues, as it may make it seem like you're trying to avoid your legal and financial responsibilities as an employer.
TL;DR: These are the top 5 reasons why you should never pay your nanny in cash.
It's essential to ensure that you have a paper trail of payments and proof of employment and that you're paying the right amount of tax and NI.
Paying your nanny in cash can lead to legal and financial issues and cause trust issues between you and your nanny.
Paying your nanny through a legitimate payroll system is always better to avoid any potential problems.
Register today for a free account with redwigwam and ensure you are paying your nanny properly and fairly.